Thursday, 11 February 2010

If I worked at Yabulu, I’d be worried

News over the last couple of days that Clive Palmer got wrong the name of the Chinese company he had (apparently) done a deal with for the “China First’ coal mine southwest of Mackay should send shudders down the spine of anyone who works at Yabulu.

Not only did he get the name of the company wong, it seems that his $60 Billion price tag on the venture is a bit shonky too.

Clive honed his business skills in the property development game and it strikes me that it is those dubious skills he is applying the mining game he is now playing.

Could it be that the purpose of his (and Anna Bligh’s) now discredited announcement about the “China First” mine was simply to beat-up the profile and the potential value of his Resourcehouse company before it’s public float on the Hong Kong Stock Exchange?

As Gavin Wendt, senior resource analyst at Mine Life, said on yesterday's ABC PM program:
"Well it's curious. I mean it's sort of been done in a very stage-managed way, designed to generate maximum publicity. The fact that the announcement was made on the weekend, reported in the Sunday papers to much fanfare, it obviously generated strong headlines. You know, it wasn't the sort of conservative, sort of managed, sort of measured approach that one would expect."
Could it be that his approach to his mining business is simply the same as any property developer’s approach to business – turn a sow’s hear into a silk purse and flog it off as quickly as possible before the punters realise they are really buying a pig?

Similarly, could his purchase of Yabulu last year simply be about milking a cash cow while the dollar and commodity prices are high? Or could it simply be part of his strategy to build-up the apparent value of his portfolio ahead of the real game of sucking in the punters through his share market float?
It all smells a bit to me and if I were working at Yabulu, I’d be a bit worried.

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